Medicaid deal draws protest

Two major information services firms have filed protests against the state’s award last month of a $550 million contract to Xerox Corp, to set up and run a new Medicaid information management system.

The protest was lodged by the losing bidder, Hewlett Packard, and Computer Sciences Corp. or CSC, with the State Comptroller Tom DiNapoli who must sign off on the deal.

HP officials confirmed that the protest had been filed as did CSC, which offered the following statement.

“We continue to communicate our concerns regarding the risky implementation schedule to the New York State Department of Health and the New York Office of the State Comptroller; most recently, through the formal protest process, filed with the Office of the State Comptroller; on June
11, 2014.”

CSC, which operates the current Medicaid management system for the state, declined to bid this time around, saying the 18 month time frame to create a new program was unrealistic.

Details of the protests weren’t immediately available but several insiders noted that Xerox has run into delays in setting up their program in other states including New Hampshire, North Dakota and Montana. They have also warned of expected delays in developing a program in California.

Xerox is also being sued by Texas officials over what they say are un-needed claims payments.

State Health Department officials have stressed that the contract with Xerox isn’t totally finalized.

The new system is supposed to process bills for New York’s $54 billion Medicaid program that serves more than 5 million people.
Thousands of health care providers must interact with the state management system to send in their bills and get paid.

The current system is said to be outdated and changes under the Affordable Care Act are also prompting states to update their management and billing systems.